Despite the large debit necessary to put this trade, the Max risk in the position is way less than that: only $130 per contract.This is one of those strategies that do not make sense on a small portfolio given the margin consumed but make perfect sense in larger ones.

Position profile:
(Click on image to enlarge)

Same profit picture as a Long Out of the Money Call. But way, way more powerful because of how it can be managed later.

Note to LTOptions members: new materials were uploaded today that detail when exactly to enter this position, which strike prices to use, how far from expiration, when to take profits, or when and how to manage the position if you want to lock-in guaranteed gains, removing risk and staying in the position, giving yourself a chance to indefinitely participate in additional gains should the market keep moving in your favor.

A Chart of IWM at market close for future reference:
(Click on image to enlarge)

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